February 8, 2016 Volume
xxii, #6
“Some people see things that are and ask, ‘why?’ Some people dream of things that never were and ask, “why not?’ Some people have to go to work and don’t have time for all that.”
— George Carlin (American comedian, actor, and writer, 1937-2008)
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RONA board accepts new takeover offer from Lowe’s
MOORESVILLE, N.C. & BOUCHERVILLE, Que. ― Lowe’s has entered into a deal with RONA inc. to acquire all of RONA’s common shares for $24 per share in cash, and all preferred shares for C$20 per share. The deal is valued at $3.2 billion (US$2.3 billion) and is more than double the value of RONA’s share price just prior to the announcement of the acquisition.
Lowe’s Canada intends to move its head office from Toronto to RONA’s headquarters in Boucherville, Que., with Lowe’s Canada president Sylvain Prud’homme continuing in the lead role. Lowe’s says it will continue to operate RONA’s multiple retail banners and distribution services to independent dealers. The result will be Canada’s biggest home improvement retailer, with revenues close to $6 billion at retail.
Lowe’s made a friendly, albeit controversial, takeover bid for RONA back in 2012 that was worth $1.8 billion. But that offer was made just ahead of a provincial election in Quebec, and got a lot of resistance from the Quebec government, which perplexed the executives at Lowe’s.
This time, the deal has been unanimously accepted by RONA’s board of directors. Despite resistance from the Parti Quebecois and the Teamsters’ union, the deal is expected to go through, pending approvals from Investment Canada and the Competition Bureau. Even RONA’s largest shareholder, the Caisse de dépôt et placement du Québec, has confirmed it will sell its 17% ownership in the company.
“The transaction is expected to accelerate Lowe’s growth strategy by significantly expanding our presence in the Canadian market through the addition of RONA’s attractive business and excellent store locations across the country,” said Robert Niblock, CEO and chairman of Lowe’s Cos. “Importantly, the transaction also provides Lowe’s with entry into Quebec, where RONA is the market leader and we have no presence.”
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Online selling, leadership keynote topics in BSIA Show’s Education Track
SURREY, B.C. — Education for dealers and vendors is going to be an important addition to the next BSIA Westcoast Building & Hardware Show & Ultimate Home Show. The event, produced by the Building Supply Industry Association of British Columbia, will be held in Surrey, B.C., at the Cloverdale Fair Grounds in the Agriplex, March 11 to 13, 2016.
The potential to grow your online sales, along with the issue of effective leadership within your organization, are the two topics that will be covered this year. Liz Drayton is part of the retail team at Google Canada, which means she works with the country’s largest retailers to help them best translate their brand and customer experience through digital media.
Drayton was a big hit at the Hardlines Conference last fall, when she explained how retailers are using apps to literally hijack customers from competitors' stores with time-limited offers that have them running through the shopping mall for a deal. Anyone trying to get their heads around the possibilities for online selling and marketing cannot afford to miss this breakfast presentation, which will take place on the morning of March 11.
Roy Prevost is a “customer service activist.” Through insightful, often humorous presentations, he provides a look into the minds of the corporate retail players and their marketing strategies.
On the morning of day two, March 12, Prevost will address an important topic for dealers and suppliers alike: the role of leadership in your company. This is a must-attend event for anyone who is:
- wondering whether you are being a leader—or just being a pain;
- leading using outdated, old-fashioned leadership concepts;
- looking for insights on how to develop leaders from within your business;
- looking to build a team of ‘go to’ workers;
- wanting to create the ideal environment to foster leaders in your business;
- interested in the five steps of leadership development; and
- wanting to know how to identify leaders within your organization.
In addition, our very own editor, Michael McLarney, will present a keynote at the Show’s gala dinner on March 11. He will share his insights into the challenges confronting dealers today, and the opportunities available in this changing retail universe of bricks and mortar versus digital selling. He will also provide important statistics on the B.C. market, including its size and top performers.
For more information about the show, contact the BSIA at 1-888-711-5656; or info@bsiabc.ca.
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Lowe’s will share expertise with RONA to increase profitability
TORONTO — Lowe’s has identified ways to cut costs and increase revenue and operating profitability through its takeover of RONA inc. Those measures could add up to an increase in profitability of least $1 billion, says the company.
Lowe’s intends to expand RONA’s offerings by applying Lowe’s specialization in categories such as appliances. It will also bring its strengths in omnichannel marketing to the RONA business. It further expects to drive pro profitability by leveraging shared supplier relationships, the expansion of Lowe's own private-label capabilities, and the elimination of RONA’s costs related to being a public company, which the company says add up to about $3 to $4 million annually.
In addition, the Lowe’s Canada head office will move from the north end of Toronto to RONA’s headquarters and main distribution centre in Boucherville, Que., on the South Shore of Montreal. Given these opportunities, Lowe’s believes there is potential to double operating profitability in Canada over five years.
While Lowe’s has been known for slashing management in other takeovers, it insists it will continue to employ the vast majority of RONA’s current employees and maintain key executives from RONA’s leadership team. It also says it will look to strengthen existing relationships with RONA’s vendor base, and potentially expand relationships both Lowe’s and RONA have developed with Canadian manufacturers and suppliers.
“We look forward to continuing our commitment to the Canadian market and further enhancing our offering to the customers of both Lowe’s and RONA,” said Sylvain Prud’homme, president of Lowe’s Canada, in a release. “We have great respect for RONA’s leadership team and RONA’s talented employee base and look forward to working together to take our businesses to the next level.”
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Tembec CEO warns of U.S. protectionism
MONTREAL — The benefit of the weaker loonie to lumber exports is likely to arouse the protectionist instincts of the U.S. lumber industry, says James Lopez, CEO of Tembec. According to the Canadian Press, Lopez issued the warning prior to a shareholder meeting last week, saying, “I think that they’re watching the Canadian dollar drop, particularly in lumber, and they’re saying, ‘This isn’t fair.’”
With the Canada-U.S. softwood lumber agreement having expired in October, Lopez believes the U.S. Lumber Coalition will argue the loonie’s position puts it at a competitive disadvantage.
A spokesman for International Trade Minister Chrystia Freeland dismissed accusations by the Conservative opposition that the government is stalling on reaching a new deal. The U.S. Lumber Council has not commented on the currency changes, but spokesman Zoltan van Heyningen stressed the importance of renewing the deal before inertia sets in.
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Barb Schering has joined CashierPRO in the customer implementations and support department. There, she will be assisting existing hardware, farm, and building supply dealer clients in the use of their CashierPRO retail POS and inventory management systems. She’ll also be providing installation and training to new clients. Schering brings more than 15 years of experience to the role, most recently as an account manager with ProfitMaster. She also has an extensive background in financial services, including eight years as controller at Sturgeon Falls Building Supplies in Sturgeon Falls, Ont. (888-250-8135, ext. 701; barb.schering@cashierpro.com)
Jessica Kuepfer has been promoted to the role of public relations manager at Home Hardware Stores Ltd. She was formerly public relations co-ordinator. She reports to Rob Wallace, director, marketing. (Jessica.Kuepfer@homehardware.ca)
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